Is it better to use a CC or loan?

Bernard_Coleslaw

Evenin' all.

I've tonight added up my CC debt and it's scared me to see it at £15k. None of it is on O% at the moment. I'm paying over £400pcm just on minimum payments, which is ridiculous.

Options:

• Balance transfer to 0% or low LOB, or
• Personal unsecured loan and pay the lot off in 5 years

Of course, each scenario would have me cutting the cards up and reassessing my spending habits. But I think I need the discipline of a fixed personal loan payment. Otherwise, I'll just keep making minimum payments again.

Is this the right option, or am I missing something?

TIA

Spirited_2

Strictly on the amount of interest you'd pay, and the flexibility, 0% credit cards are your best option. Many people find that a fixed payment on a loan can lead to them forgetting their past debts, not changing their ways and end up running up the credit cards again.

Of course this may not be the case for you, and if you think that you can't be disciplin about uping the credit card payments then loans are an option.

Do check out the snowball calculator: http://www.whatsthecost.co.uk/snowball.aspx
before you make your mind up.

moozie_2

Hello there

Although I have taken out 2 loans, only one of them was for consolidation. I thought it would be good to have one amount coming out every month etc. What I didn't do was budget properly and live within that budget. Instead, I paid everything off and carried on spending like before. Big mistake.

Now I am paying off my 2 loans, 1 credit card, 1 overdraft and 1 catalogue and have not givena thought to another consolidation loan. I might do if the interest is very low - all my debts apart from the loans are at 0% for fixed terms - but in general, I am making big overpayments and will bring the balances to nil in good time.

Only you know what will suit you but please learn from my experience and don't fall into the consolidation trap that so many have fallen into just like me.

Best of luck.

Tr@cker

I'd get the amex blue at 4.9% LOB no loan can beat that and for the rest something similar. Otherwise the flexible non-rule 78 loans are best.